It is insufficiently recognised just how much the pendulum has swung against Silicon Valley in recent years. A couple of years ago, it was widely seen as heralding a glorious new technological era that would be a great boon for humanity

Joseph Mariathasan: Can UK benefit from US immigration woes?

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The murder last week of an Indian IT specialist in Kansas, in what appears to be a hate crime, has sent shock waves through India. Indian parents are going to be more reluctant to send their children to the US for further education.

President Trump’s clampdown on immigrants may end up creating a climate of hostility that would ultimately backfire on America’s long term economic prospects.

The great strength of the US has always been that it has managed to attract the best and brightest from across the world to its shores. Silicon Valley would not be where it is today without Chinese and Indian immigrants. Immigrants have founded half the start-ups in recent years. But the rate of start-ups has declined significantly, primarily as a result of immigration policies in the US. Trump’s isolationist stance is likely to exacerbate this trend significantly.

Whether Donald Trump wins or loses his legal battle on immigration, the chilling effect on potential new highly qualified immigrants will not be to America’s benefit, although it may be to Europe’s.

Immigrants from Iran, one of the seven Islamic countries on Trump’s excluded list, founded – or account for many leadership positions at – leading US tech giants including Twitter, Dropbox, Oracle, Expedia, eBay, and Tinder.

India’s famed institutes of technology (IITs) have long provided a steady source of the highest calibre graduates for America’s high tech industries. Examples include Vinod Khosla, an IIT Delhi graduate who is the co-founder of Sun Microsystems, which amongst other achievements invented the Java programming language.

As Ananya Bhattacharya writes, during the 1980s and 1990s, the trajectory of an IIT graduate was fairly predictable: Get a B-Tech degree from one of India’s premier schools, make a beeline for one of the top universities in the US, and settle down abroad with a high-paying job.

Google CEO Sundar Pichai is a good example of that, as are many of the partners at Goldman Sachs and other US financial firms. Pichai went from IIT-Kharagpur in West Bengal, to study material sciences and engineering at Stanford University, secured an MBA from the University of Pennsylvania’s Wharton School, and ended up in Silicon Valley.

But a survey of nearly 20,000 alumni from IIT-Bombay reveal that the number of students going to the US has dropped dramatically since 2000. Some 41% of respondents who graduated prior to 2000 settled abroad, while only 15.8% who graduated post-2000 have done so.

Clearly, a key reason for this has been the increasing attractions of India itself as its economy flourishes. But what also comes through from the survey is a declining interest in the US. As Bhattacharya points out, while four out of five graduates living in foreign countries reside in America, the US has become less of a magnet for more recent graduates. Among the post-2000 IIT-Bombay graduates, Europe has become a more popular destination, alongside the Middle East, and east and south-east Asia.

Trump may not be the cause of the overall trend of declining interest in the US from India’s IIT graduates, but his actions are clearly exacerbating the trend. While that may be a loss to America, it may be gain to Europe generally and a post-Brexit Britain more specifically.

While Europe faces populist parties with strong anti-immigrant platforms and similar problems, the UK’s post-Brexit strategy needs to embrace the potential benefits of immigration, albeit within a well thought-out strategy. Whether the UK can provide the environment that will attract the best and brightest in the world alongside a Trump-led isolationist America may well determine the future long-term success of a post-Brexit Britain.

Readers' comments (1)

Peter KraneveldMon, 27 Feb 2017 5:05 pm

It seems pretty obvious to me that Brexit was to a large degree decided on exactly the same xenophobia as Trump's election. That alone will preclude a shift of immigration from the US to the UK. There are similar sentiments in other European countries, but the crucial difference is that in those countries, xenophobia is not a government policy, as it is today in the US and the UK.

That said, it would be in everyone's interest if developing countries would develop and economic fugitives would stay home - something most of them would probably prefer. This is easily done. If developed countries would just give up protectionist trade policies, especially in the field of agriculture, the problem would be marginalised. According to the OECD, food prices consist of around 50% subsidies in the US, 65% in the EU and 85% in Japan. All this money protects the small and diminishing domestic agri sector and its powerful lobby machine. Therefore, the easy solution is politically impossible and the only other option is immigration. OECD countries can keep out developing countries' goods or developing countries' people, but not both.